bankruptcy law specialist Interview Questions and Answers

1. What are the different chapters of bankruptcy available under the U.S. Bankruptcy Code?

   • Answer: The main chapters are Chapter 7 (liquidation), Chapter 9 (municipalities), Chapter 11 (reorganization), Chapter 12 (family farmers and fishermen), and Chapter 13 (adjustment of debts of individuals with regular income).

2. Explain the difference between Chapter 7 and Chapter 13 bankruptcy.

   • Answer: Chapter 7 involves liquidation of non-exempt assets to pay creditors. Chapter 13 allows individuals with regular income to create a repayment plan over three to five years.

3. What is a "means test" in bankruptcy?

   • Answer: A means test determines if an individual is eligible to file for Chapter 7 bankruptcy based on their income and expenses. If income is above a certain threshold, Chapter 7 may be denied, and Chapter 13 may be required.

4. What are exempt assets in bankruptcy?

   • Answer: Exempt assets are those protected from creditors during bankruptcy proceedings. Examples vary by state but often include a certain amount of equity in a home, a vehicle, and personal property.

5. What is an automatic stay?

   • Answer: An automatic stay is a court order that prevents creditors from taking collection actions against a debtor once a bankruptcy petition is filed.

6. What is a reaffirmation agreement?

   • Answer: A reaffirmation agreement is a contract where a debtor agrees to continue making payments on a debt after bankruptcy discharge. It requires court approval.

7. What is a bankruptcy discharge?

   • Answer: A bankruptcy discharge is a court order relieving the debtor of the personal liability for certain dischargeable debts.

8. What types of debts are typically not dischargeable in bankruptcy?

   • Answer: Non-dischargeable debts often include student loans (under certain circumstances), taxes, alimony, child support, and debts obtained through fraud.

9. What is a creditor's meeting (341 meeting)?

   • Answer: The 341 meeting is a meeting of creditors where the debtor is examined under oath by the bankruptcy trustee regarding their assets, liabilities, and financial affairs.

10. What is the role of a bankruptcy trustee?

    • Answer: The bankruptcy trustee administers the bankruptcy case, investigates the debtor's financial affairs, and liquidates assets in Chapter 7 cases. In Chapter 13, they oversee the debtor's repayment plan.

11. Explain the concept of "priority claims" in bankruptcy.

    • Answer: Priority claims are debts that have precedence over other unsecured debts in receiving payment from the debtor's assets. Examples include child support and certain taxes.

12. What is a secured claim?

    • Answer: A secured claim is a debt backed by collateral, such as a mortgage on a house or an auto loan. The creditor can seize the collateral if the debt is not repaid.

13. What is an unsecured claim?

    • Answer: An unsecured claim is a debt not backed by collateral. Credit card debt and medical bills are common examples.

14. What is a preference?

    • Answer: A preference occurs when a debtor pays one creditor more than others shortly before filing for bankruptcy, giving that creditor an unfair advantage.

15. What is a fraudulent transfer?

    • Answer: A fraudulent transfer involves the debtor transferring assets shortly before filing for bankruptcy with the intent to hinder or defraud creditors.

16. What is the difference between a voluntary and an involuntary bankruptcy filing?

    • Answer: A voluntary bankruptcy is filed by the debtor themselves. An involuntary bankruptcy is filed by creditors against a debtor who is unable to pay their debts.

17. What are the requirements for filing an involuntary bankruptcy petition?

    • Answer: Typically, a certain number of creditors (often three) must be owed a specific amount of unsecured debt, and the debtor must be generally insolvent.

18. What is a confirmation hearing in Chapter 13 bankruptcy?

    • Answer: A confirmation hearing is a court proceeding where the bankruptcy court reviews and approves or denies the debtor's proposed Chapter 13 repayment plan.

19. What is a plan of reorganization in Chapter 11 bankruptcy?

    • Answer: A plan of reorganization outlines how a debtor will restructure its debts and business operations to emerge from bankruptcy. It requires creditor approval and court confirmation.

20. What is the role of the debtor-in-possession (DIP) in Chapter 11?

    • Answer: The DIP continues to manage the business during the Chapter 11 proceedings, subject to court supervision. They have certain fiduciary duties to creditors.

21. Explain the concept of "cramdown" in Chapter 13.

    • Answer: Cramdown is a process where a Chapter 13 plan can be confirmed over the objection of a creditor, typically by the court imposing a plan that is deemed fair and equitable.

22. What is a claim objection in bankruptcy?

    • Answer: A claim objection is a challenge to the validity or amount of a creditor's claim filed in the bankruptcy case.

23. What is an adversary proceeding in bankruptcy?

    • Answer: An adversary proceeding is a separate lawsuit filed within the bankruptcy case to resolve a specific legal dispute, such as a claim of fraud or preference.

24. What is a motion to lift the automatic stay?

    • Answer: A motion to lift the automatic stay is a request by a creditor to the bankruptcy court to allow them to pursue collection actions against the debtor despite the bankruptcy filing.

25. What are some common defenses against a motion to lift the automatic stay?

    • Answer: Common defenses include demonstrating that the collateral is adequately protected, that the debtor needs the asset to operate a business, or that the creditor's claim is disputed.

26. What is the impact of bankruptcy on co-signers?

    • Answer: Bankruptcy generally does not discharge debts of co-signers. They remain liable for the debt even if the primary debtor's obligation is discharged.

27. How does bankruptcy affect credit scores?

    • Answer: Bankruptcy significantly lowers credit scores and remains on credit reports for several years, making it difficult to obtain credit in the future.

28. What is a debtor's duty of disclosure in bankruptcy?

    • Answer: The debtor has a legal duty to fully and honestly disclose all of their assets, liabilities, and financial information to the bankruptcy court and creditors.

29. What are the consequences of failing to disclose assets in bankruptcy?

    • Answer: Failure to disclose assets can result in the bankruptcy case being dismissed, denial of a discharge, and potential criminal prosecution for fraud.

30. What is the role of the bankruptcy court?

    • Answer: The bankruptcy court oversees the bankruptcy proceedings, makes rulings on legal issues, and ensures compliance with the Bankruptcy Code.

31. What is a "no asset" Chapter 7 case?

    • Answer: A "no asset" case is a Chapter 7 where the debtor has no non-exempt assets available to distribute to creditors.

32. What are some ethical considerations for bankruptcy attorneys?

    • Answer: Ethical considerations include maintaining client confidentiality, avoiding conflicts of interest, providing competent representation, and complying with all applicable rules of professional conduct.

33. How does bankruptcy law intersect with other areas of law?

    • Answer: Bankruptcy law interacts with many areas, including contract law, property law, corporate law, tax law, and criminal law.

34. What are some recent developments or changes in bankruptcy law?

    • Answer: (This requires research on current events in bankruptcy law. An example might be recent legislative changes affecting student loan discharge or updates to means testing calculations.)

35. What is your experience with [specific area of bankruptcy law, e.g., Chapter 11 reorganizations]?

    • Answer: (The candidate should detail their specific experience here)

36. Describe a challenging case you handled and how you overcame the obstacles.

    • Answer: (The candidate should describe a specific case and their problem-solving approach)

37. How do you stay current with changes in bankruptcy law?

    • Answer: (The candidate should discuss professional development activities, such as attending conferences, reading legal journals, and participating in continuing legal education courses.)

38. What software or technology do you use in your bankruptcy practice?

    • Answer: (The candidate should mention relevant case management software, legal research databases, and other relevant technology)

39. How do you communicate with clients about complex legal matters?

    • Answer: (The candidate should explain their approach to clear and concise communication, tailoring explanations to the client's understanding)

40. How do you handle difficult clients or those who are experiencing emotional distress?

    • Answer: (The candidate should describe their strategies for managing difficult clients, showing empathy and professionalism)

41. What are your salary expectations?

    • Answer: (The candidate should provide a realistic salary range based on their experience and the job market)

42. Why are you interested in this position?

    • Answer: (The candidate should express genuine interest in the specific position and the organization)

43. What are your strengths and weaknesses?

    • Answer: (The candidate should provide a balanced assessment of their skills and areas for improvement)

44. Where do you see yourself in five years?

    • Answer: (The candidate should express career aspirations that align with the position and organization)

45. Describe your experience working in a team environment.

    • Answer: (The candidate should provide examples of teamwork and collaboration)

46. How do you prioritize tasks and manage your time effectively?

    • Answer: (The candidate should describe their time management strategies)

47. How do you handle pressure and deadlines?

    • Answer: (The candidate should describe their ability to work under pressure and meet deadlines)

48. What is your understanding of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)?

    • Answer: (The candidate should describe the key provisions and impact of BAPCPA)

49. What is your experience with negotiating with creditors?

    • Answer: (The candidate should describe their negotiation skills and experience)

50. How familiar are you with the Federal Rules of Bankruptcy Procedure?

    • Answer: (The candidate should demonstrate their familiarity with the rules)

51. What is your experience with bankruptcy litigation?

    • Answer: (The candidate should describe their experience in court proceedings)

52. What is your experience with preparing and filing bankruptcy petitions?

    • Answer: (The candidate should describe their experience with the preparation and filing process)

53. What is your understanding of the concept of equitable subordination?

    • Answer: (The candidate should explain the concept and its application)

54. What is your understanding of the absolute priority rule?

    • Answer: (The candidate should explain the rule and its application)

55. What is your experience with representing debtors versus creditors?

    • Answer: (The candidate should describe their experience representing both sides)

56. What are your thoughts on the effectiveness of the current bankruptcy system?

    • Answer: (The candidate should provide a thoughtful and informed opinion)

57. What are some potential reforms you would suggest for the bankruptcy system?

    • Answer: (The candidate should offer informed suggestions for improvement)

58. Describe your experience with client intake and case assessment.

    • Answer: (The candidate should describe their process for evaluating client needs)

59. How do you ensure compliance with all applicable laws and regulations?

    • Answer: (The candidate should describe their approach to legal compliance)

60. Describe your experience with legal research and writing.

    • Answer: (The candidate should showcase their legal research and writing skills)

61. How do you handle unexpected challenges or setbacks in a case?

    • Answer: (The candidate should describe their ability to adapt and overcome obstacles)

62. Do you have experience with mediation or arbitration in bankruptcy cases?

    • Answer: (The candidate should describe their experience with alternative dispute resolution)

63. How do you manage your workload and prioritize competing demands?

    • Answer: (The candidate should describe their workload management techniques)

64. Describe a time you had to make a difficult ethical decision.

    • Answer: (The candidate should provide an example that demonstrates ethical decision-making)

65. What are your technological skills relevant to bankruptcy law practice?

    • Answer: (The candidate should list relevant software and technology proficiency)

66. How do you maintain client confidentiality and comply with data privacy regulations?

    • Answer: (The candidate should describe their practices for ensuring client confidentiality)

67. What is your understanding of the implications of the Fair Debt Collection Practices Act (FDCPA) in bankruptcy cases?

    • Answer: (The candidate should explain how the FDCPA relates to bankruptcy)

68. Are you comfortable working independently and as part of a team?

    • Answer: (The candidate should highlight their ability to work independently and collaboratively)

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